Note 7:

Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
June 30, 2011:
U.S. government agencies	$	1,818	$	82	$	1	$	1,899
Mortgage-backed securities of government sponsored entities		104,174		3,216		15		107,375
Private-label collateralized mortgage obligations		2,122		67		-		2,189
State and political subdivisions		23,600		675		86		24,189

Totals	$	131,714	$	4,040	$	102	$	135,652

March 31, 2011:
U.S. government agencies	$	1,938	$	71	$	1	$	2,008
Mortgage-backed securities of government sponsored entities		99,779		2,597		118		102,258
Private-label collateralized mortgage obligations		2,282		56		-		2,338
State and political subdivisions		25,330		350		328		25,352

Totals	$	129,329	$	3,074	$	447	$	131,956

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
June 30, 2011:
U.S. government agencies	$	150	$	––	$	1	$	149
Mortgage-backed securities of government sponsored entities		409		15		––		424
State and political subdivisions		14		1		––		15

	$	573	$	16	$	1	$	588

March 31, 2011:
U.S. government agencies	$	153	$	––	$	1	$	152
Mortgage-backed securities of government sponsored entities		417		12		––		429
State and political subdivisions		21		1		––		22

	$	591	$	13	$	1	$	603

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Amortized cost and fair value of available-for-sale securities and held-to-maturity securities at June 30, 2011 by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)

Within one year	$	764	$	791	$	14	$	15
One to five years		2,125		2,192		-		-
Five to ten years		7,479		7,775		––		––
After ten years		15,050		15,330		150		149

		25,418		26,088		164		164

Mortgage-backed securities of government sponsored entities		104,174		107,375		409		424
Private-label collateralized mortgage obligations		2,122		2,189		-		-

Totals	$	131,714	$	135,652	$	573	$	588

The carrying value of securities pledged as collateral to secure public deposits and for other purposes was $52.8 million and $55.7 million at June 30, 2011 and March 31, 2011, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at June 30, 2011 and March 31, 2011, was $9.2 million and $28.6 million, which represented approximately 7% and 22%, respectively, of the Company's aggregate available-for-sale and held-to-maturity investment portfolio. These declines resulted primarily from changes in market interest rates.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these government agency, mortgage-backed and state and political subdivision securities are temporary at June 30, 2011.

Should the impairment of any of these government agency, mortgage-backed and state and political subdivision securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. The following table shows the Company's investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2011

	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(In thousands)

U.S. government agencies	$	-	$	-	$	324	$	2	$	324	$	2
Mortgage-backed securities of government sponsored entities		3,716		15		-		-		3,716		15
State and political subdivisions		4,426		64		762		22		5,188		86
Total temporarily impaired securities	$	8,142	$	79	$	1,086	$	24	$	9,228	$	103

March 31, 2011

	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(In thousands)

U.S. government agencies	$	-	$	-	$	329	$	2	$	329	$	2
Mortgage-backed securities of government sponsored entities		17,150		118		-		-		17,150		118
State and political subdivisions		10,403		304		761		24		11,164		328
Total temporarily impaired securities	$	27,553	$	422	$	1,090	$	26	$	28,643	$	448